No tax hike in next budget

Finance Minister AHM Mustafa Kamal yesterday outlined an ambitious budget plan for the next fiscal year without putting extra burden of tax on people.

“Tax will not be raised even by a single taka in the next budget, rather it would be reduced to some extent,” he said at a press briefing at the National Economic Council's auditorium in the planning ministry.

Kamal is expected to place the budget at the Jatiya Sangsad on June 13.

The minister also spoke about different measures to be taken in the next budget to boost revenue collection, the banking sector, the stock market and the insurance sector.

The size of the next budget will be Tk 80,000 crore to Tk 90,000 crore more than the current budget, he mentioned.

The volume of the current budget is Tk 4,64,573 crore.

Since the government will have to allocate large funds for completing the mega projects, it will need to collect more revenue, Kamal pointed out.

The minister said that though the government has no plan to increase taxes, it intends to bring more people under the tax net.

“We have a lot of scope for widening the tax net. We will use this opportunity,” he mentioned.

Kamal also said multiple rates will be introduced in the new VAT law from the next fiscal year, and that 15 percent VAT will be imposed at the import stage.

Fresh university graduates will be recruited under special arrangements for collecting VAT from businesses.

“We will train fresh graduates in VAT collection, and I am hopeful that they can perform well,” the minister added.

About the banking sector, the minister said the government has a plan to raise the paid-up capital for a bank to Tk 1,000 crore and for an insurance company to Tk 500 crore.

He, however, did not say when the raise will come into force.

Currently, the paid-up capital for a bank is Tk 400 crore and for an insurance company Tk 30 crore.

On relaxing the rescheduling policy for bank loan defaulters, the minister said if businesspeople are sent to jail, there will be no business.

An “exit policy” should be in place so that they can free themselves from the burden of defaulted loans.

Citing his own case as an example, the minister said he had lost Tk 1,800 crore when he was arrested during the tenure of a caretaker government.

“I lost the amount because I was in jail,” Kamal said.

All people, government assets and also private sector assets such as commercial buildings will be brought under insurance coverage, he noted.

Mega projects, including the Padma Bridge, will also be brought under the coverage, he added.

“The government plans to bring the mega projects under the insurance coverage so that important installations can be taken care of in case of a disaster.”

The minister also said he will take steps to strengthen the capital market so that it can generate employment and attract investment.

Kamal said he will sit with the stakeholders of bourses every month to discuss ways to boost the markets.

He also mentioned that if needed, the government will even offer tax benefits to the stakeholders for the revival of the capital market.